INSIGHT ON: Business Services – Health care conundrum

Posted on Dec 6, 2013 :: Business Services , Insight On
Posted by , Insight on Business Staff Writer

BizServicesThe Affordable Care Act, often known simply as ObamaCare, will have little impact on employers who already provide health coverage for their workforce.

“A lot of employers are already set up with plans that are compliant,” says Todd Cleary, a lawyer at Godfrey & Kahn who specializes in employee benefit regulation. “Companies already offering coverage won’t have to make any changes.”

Well, probably not – but because the regulations are in flux, it’s best to check with expert consultants like Cleary just to make sure.

The regulation has been changing almost daily, even before the mid-November announcement from President Obama that individuals would be allowed to keep existing insurance programs even if they don’t match the coverage levels prescribed in the ACA. The best advice is to check with at least one consultant – an insurance agent, an accountant or an attorney. Chris Hanson, at Hanson Benefits in Appleton, says she was recently on a panel about the ACA with a lawyer who was wrong about some impacts of the ACA on local health plans.

Pam Branshaw, a partner at Wipfli LLP in Eau Claire, says the Kaiser Family Health Foundation has a website that provides accurate information about ObamaCare in clear language for individuals and employers. Talk radio hosts are not the best source of accurate information, say professionals who have occasionally had to clear up misinformation that clients picked up listening to AM radio. Wipfli also has information for employers on its website, www.wipfli.com/healthcare.

Cleary says there are a number of small changes around the edges of health care that employers should be aware of. In September, the IRS issued some new rules around ancillary plans that smaller employers sometimes use to let employees buy insurance or to pay for medical care. Wellness plans also have some new rules effective Jan. 1.

Branshaw says she spends a lot of her time educating clients so they can figure out what they need. The firm subscribes to a number of research services to keep up-to-date on the law, she added.

The first step with clients is figuring if they have more than 50 full-time employees. Companies on the edge of that number who want to stay below it have to check eligibility rules and maintain average employment under 50 for 2014, Cleary says, so they should start targeting that figure in January.

“If they are over 50 employees and offer health insurance, it is business as usual. If they have part-time employees, they need to closely monitor hours and offer insurance to employees who are working more than 30 hours a week,” Branshaw says.

“The problem is that it is such a complicated law and everybody’s situation is different,” she says. “Among large employers, everyone offers pretty much similar benefits, but small employers have to be creative to get tax-free benefits to employees.”

Cafeteria plans will still be permitted, Branshaw says, but employers who offer them also have to offer group health coverage. The law aims to take individual insurance products out of the small business market and have individuals go to the state marketplace to buy coverage from standardized plans that allow consumers to compare coverage and prices. (Branshaw was speaking in mid-November; new regulations in October had changed the rules for cafeteria plans and she was working on making the changes for 51 clients, and that was before President Obama changed the rules for individuals.)

Hanson says the law is really focused on the individual and small business market. There are some plusses in the law, but with a price, she explained.

“You cannot open the arms of the carriers to more people with no underwriting and have it cost less,” Hanson says.

For one of Hanson’s clients, who faced a 60 percent increase because the staff had a range of health problems, she has advised waiting until January when their health records won’t be a factor in getting coverage.

Some carriers have chosen to sit out 2014 because they can’t measure their risks, she added. Other carriers are offering clients the ability to renew Dec. 1 for a year, regardless of when their existing policies expire, and many of them are offering reductions in premiums or very small increases. She can quote from seven carriers and has found some significant savings by moving clients to new plans. One client achieved a 40 percent reduction for a small group that had a high-risk individual who has since left. The group’s existing carrier wouldn’t change the premium, but new carriers reviewed the risks and offered lower rates.

“I think carriers have looked at their blocks of business and decided to keep these groups on their books.” Hanson advises most clients to renew and then they will have a year to let the dust settle.

Wisconsin declined to set up its own health exchange, so residents who need to buy health insurance individually are stuck with the troubled federal health exchange site. For a view of how a state site can work, visit Minnesota’s: www.health.state.mn.us/mnsurenetworks/.

Employers should stay in touch with their agents starting about mid-year because all these policies that are renewing in December will also be expiring at the same time.

“Next December is going to be a killer,” Hanson says.